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4 ways to manage financial stress

Money is one of the biggest stressors in many American’s lives. A 2017 AICPA survey found that 56% of Americans said debt negatively affected their lives, and 39% said the debt made them feel anxious while 21% said it caused tension with a spouse or partner. And the Institute for Divorce Financial Analysts found money issues to be the third leading cause of divorce.

Now with more than 36 million Americans losing their jobs due to the COVID-19 pandemic, stress levels and anxiety are likely climbing. Watching debt levels rise while struggling to make monthly payments, can potentially lead to a feeling of hopelessness and have a serious impact on your quality of life.

“The good news is, you don’t need to be held hostage by financial stress,” said Michael Eisenberg, CPA/PFS, and member of the AICPA’s Consumer Financial Education Advocates. “There are several steps you can take to better manage your finances and reduce financial stress and anxiety.”

1. Take inventory of your finances

How much are you saving and how much do you owe? Are you spending more than you make? Are you maintaining manageable debt levels and staying current on all bills?

These are all questions you need to answer and assess honestly. It’s important to know where you stand financially, including regularly reviewing your spending habits, debt levels, savings and investments, and credit reports and scores.

Start by reviewing your cash flow. It’s important to know how much is coming in, where you are spending, and where you can cut expenses and increase savings. You will need to inventory all debt and categorize it by type, institution held, interest rates and maturity dates. Also look at all recurring costs, such as utilities, to determine what must be paid each month.

“Make sure you have enough in the way of cash and other liquid assets that can carry you through tough times,” said Eisenberg

2. Keep perspective and know what you can (and can’t) control

“Markets go up, but they also go down,” said Eisenberg. “These fluctuations are often out of your control. But it is generally easier to manage finance-related stress if you understand the financial issues that can be addressed, and which are out of your control.”


One great way to take control of your finances is to build a solid financial plan. Work with a CPA or financial advisor to determine retirements and savings needs and investment growth targets, then build an investment portfolio that can help you reach those goals.

“If your investments mix is based on a solid financial plan, then you should be well suited to weather market swings,” said Eisenberg. “Do not let sudden or quick changes in the overall market cause you to panic. Stick with your plan.”

Be sure to review that plan with your financial advisor on a regular basis to adjust for changes in your savings needs, growth targets or other life events, such as marriage, divorce, a new child or job loss.

3. Take care of your physical, mental and emotional health

“Staying at home and spending half the day watching the news—local, world or financial—can exacerbate stress and anxiety levels, especially if you’re fixated on your finances,” said Eisenberg. “Be careful not to spend the day continually hitting refresh on your stock portfolio to see how it is doing.

Exercise and eating healthy can go a long way toward helping you address stress and anxiety. With so many people working from home during the pandemic, many are spending a greater than normal time sitting at a desk or on a couch staring at a screen.

Going out for a walk or a jog can help improve both physical and mental strains. According to the Anxiety and Depression Association of America, exercise is effective at reducing fatigue, improving alertness and concentration and improving cognitive function. It also helps produce endorphins with improves the ability to sleep and reduce stress.

Be sure to take time to give yourself and mental break. Take time out during the day for a walk, meditation, yoga or catching up on that book you wanted to read. Or, reach out to family or friends to see how they are doing and talk about your concerns.

“Use these opportunities to disconnect from your stressors while also reminding you about what’s really important in life – family and friends,” said Eisenberg.

And don’t be afraid to seek out help from trained mental health professionals who can help you address your stress and anxiety.

4. Find opportunities and tools to help you today and in the future

One great way to reduce your financial stress it to put much of your money management on autopilot.

First, take advantage of autopay options to reduce how many bills and payments you have to remember each month. At the same time, set up automatic savings plans to build an emergency fund for future economic downturns.

Leverage apps and other software to track your spending and find areas to cut back. There are many wonderful free ones available. Sign up for alerts from your bank or credit card providers to make sure you can fraudulent charges quickly.

Lastly, try to implement good financial management and planning and maintain that program beyond the downturn.

“This is a turbulent time, but just know that it will end,” says Eisenberg. “The reality is that we have gone through one crisis or another every few years. This too shall pass.”